After a months-long streak of losses, Elon Musk might receive a final blow in his current trial on Tesla tweets.
A three-week trial is coming to a first, possible resolution this week as analysts try to break apart the case with crude numbers. Elon Musk’s trial on his Tesla tweets almost five years ago could cause the billionaire to lose even more of his fortune.
2023 was not off to a good start for Elon Musk, CEO of Tesla, Twitter and Space X. Of the three, Tesla is possibly his most important holding, amounting for most of his fortune. And exactly because of Tesla Musk lost so much of his net worth in the last few months.
Musk’s increasing commitment with Twitter, which turned the company from a struggling social network to absolute wasteland, had Tesla investors lose trust in him. The car manufacturer lost over 60% in value in just one year.
In early January, Tesla managed to lose 47 billion in value in a single day, while delaying production of new models and postponing projects.
But all of this was just the beginning for Elon Musk, who lost his spot as world’s richest man precisely because of Tesla’s demise.
In the first weeks of January, he was summoned by a San Francisco court concerning two tweets he made in 2018. Because of these tweets, he could face charges up to $11 billion.
What is Elon Musk’s trial about
In a tweet published on August 7th 2018, Elon Musk announced he would take Tesla private, buying it personally. Immediately after the announcement, the price of Tesla stocks skyrocketed.
A following tweet further fueled Tesla’s hikes, when Musk said the deal would be arriving shortly, needing only confirmation from shareholders.
However, after ten days from the original tweet, Elon Musk said the deal was off and Tesla would stay public. This, understandably, made investors furious.
Now said investors are suing Elon Musk, claiming that his tweets drove Tesla’s prices out of the natural tracks of the market. Indeed, after the initial hike, Tesla’s stocks went down again.
After three weeks of trial, with Musk continuously testifying that he had only his investor’s wellbeing in mind, a series of analyses have been commissioned. The jury needs to assess if and how much Musk’s tweet made investor’s lose money.
Economist Michael Hartzmark estimated that, during that 10-day period, Tesla’s shareholders lost between $4 and $11 billion in value.
Were the jury to agree with Musk’s ill conceived intentions, Tesla will have to pay the price in full. Given the already shaky state of Tesla, this could deal a final blow to the car manufacturer. Or at least to his CEO.
